A. History and Development of the Company monday.com was founded in 2012 under the name DaPulse Labs Ltd. and changed its name to monday.com Ltd. in December 2017. In June 2021, we listed our shares on the NASDAQ Global Market. We are a company limited by shares organized under the laws of the State of Israel. We are registered with the Israeli Registrar of Companies. Our registration number is 514744887. Our principal executive offices are located at 6 Yitzchak Sadeh, Tel Aviv Israel, and our telephone number is +972(55) 939-7720. Our website address is www.monday.com. We use our website as a means of disclosing material non-public information. Such disclosures will be included on our website in the “Investor Relations'' sections. Accordingly, investors should monitor such sections of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein. We have included our website address in this annual report solely for informational purposes. Our SEC filings are available to you on the SEC’s website at http://sec.report. This site contains reports and other information regarding issuers that file electronically with the SEC. The information on that website is not part of this annual report and is not incorporated by reference herein. Our agent for service of process in the United States is monday.com, Inc., located at 246 5th Avenue, Suite 305 New York, NY 10001. 46 47 B. Business Overview Overview monday.com democratizes the power of software so organizations can easily build software applications and work management tools that fit their needs. We call our platform ‘Work OS’, and we believe we are pioneering a new category of software that will change the way people work and businesses operate. Our cloud-based platform is a no-code and low-code framework that consists of modular building blocks that are simple enough for anyone to use, yet powerful enough to drive core business within any organization. Our platform also integrates with other systems and applications, creating a new connective layer for organizations that links departments and bridges information silos. On top of the Work OS platform, we have built a product suite, for the marketing, project management, work management, customer relationship management (“CRM”) and software development verticals to address the needs of specific industries and use cases. We also offer independent products that can be used without the Work OS, including Canvas, a digital whiteboard and WorkForms, which allows users to create personalized forms or surveys and gain organizational insights. By using our platform and products, our customers can simplify and accelerate their digital transformation, enhance organizational agility, create a unifying workspace across departments, and increase operational efficiency and productivity. As of December 31, 2021, we served over 152,000 customers across over 200 industries in more than 200 countries. Our customers use our platform for thousands of use cases, typically deploying our software in one or more of the following three categories: (1) to build business-critical software applications, (2) to build work management tools, and (3) to act as a connective layer to form a unified workplace and integrate applications across an organization. Our Growth Strategies We intend to drive the growth of our business by executing the following strategies: • Work OS platform evolution. We have a strong history of technological innovation, releasing new building blocks and features on a regular basis and making frequent updates to our platform. We intend to continue making significant investments in research and development and hiring top technical talent to enable new use cases, serve more verticals and increase enterprise-grade features on our platform. Our ability to innovate is amplified by our apps marketplace, with external developers also expanding our building blocks and creating software applications and work management tools that fit a variety of use cases. We believe these investments will expand our addressable market by enabling us to serve more customers in new verticals and customers in regulated industries with greater security requirements. 48 • Grow and invest in our ecosystem strategy. We opened our platform to developers, channel partners, global system integrators, and customers to create their own building blocks. While marketplace vendors have already monetized their apps through third-party payment systems, we recently launched a payment processing system directly from within the platform. • Providing more value to and increasing the number of large accounts: We are constantly adding tools and services to drive adoption and expansion to customers of all sizes while continuing to expand our focus on the needs of larger enterprise accounts. We will also continue to reach out to and expand our partner ecosystem, to deepen and broaden product adoption and scale. • Augment our vision with a versatile suite of Work OS-based and independent products. We have built five products on top of our platform, which connects with our vision to provide a Work OS that works across organizations. We customize the user experience across the customer lifecycle, from initial discovery through marketing campaigns to onboarding with pre-designed workflows, templates, automations, and integrations. We prioritize the creation of new products by focusing on customer demand and go-to-market. Our products include: monday work management to build workflows that suit their needs using no-code building blocks to manage any kind of work; monday marketer, a product for running marketing campaigns; monday dev, a product that enables software development teams to build agile product workflows; monday projects, a project management product; and monday sales CRM, a sales CRM. We also have two additional, independent products based on specific customer needs: WorkForms, which allows users to create personalized forms or surveys and gain organizational insights. • Scaling our go-to-market. We continue to scale our go-to-market through the following: — Continuing to scale our self-serve funnel complimented by expanding sales-led motion. Our focus on seamless adoption of our platform starts with ensuring that customers can easily and independently get up and running on one of our products built on the Work OS. This is accomplished through a self-serve funnel where virtually any user can sign up and immediately gain value, regardless of their technical skills. — Drive growth by acquiring new customers. To drive new customer growth, we intend to continue investing in sales, marketing, and our partner ecosystem, with a focus on delivering complete products and tailored features for specific use cases, both top-down and bottom-up selling to engage both business users and decision-makers, paid and organic customer outreach and more account-based marketing outreach efforts. — Drive increased adoption and expansion within our existing customer base. As our customers realize the benefits of our platform and products, they typically add more users and expand to other products and use cases within the Work OS, while expanding across different departments. As a result, our Net Dollar Retention Rate for customers with more than 10 users was over 135% for the three months ended December 31, 2021, and over 115% for the three months ended each of December 31, 2020, and 2019. We plan to continue investing in ways to expand within our existing customer base. For definition of Net Dollar Retention Rate see Item 5 – Operating and Financial Review and Prospects – Key Business Metrics. — Expand our global footprint. We will continue investing in local advertising channels, partnerships, and localizing our platform to address existing and new regions. We believe there is an opportunity to increase our global presence even further over time. 49 Our Success by Numbers We have experienced rapid growth since launching our product in 2014. Our revenue was $308.2 million, $161.1 million, and $78.1 million for the years ended December 31, 2021, 2020, and 2019, respectively, representing an increase of 91% ,106%, and 143% in the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, we had a net loss of $129.3 million, $152.2 million, and $91.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. We had positive net cash provided by operating activities of $16.4 million in the year ended December 31, 2021, and negative cash used in operating activities of $37.2 million, and $36.7 million in the years ended December 31, 2020, and 2019, respectively, with positive adjusted free cash flow of $9.9 million for the year ended December 31, 2021, and negative adjusted free cash flow of $40.7 million and $38.4 million for the years ended December 31, 2020, and 2019, respectively. Adjusted free cash flow is a non-GAAP financial measure. For additional information concerning the limitations and reconciliations of our non-GAAP financial measures to the most directly comparable financial measures stated in accordance with GAAP, see “Non-GAAP Financial Measures” In Item 5.A. below. Industry Trends We believe we are at the center of generational shifts in technology and the way people work that create significant opportunities for our business, including the following trends: Organizations are Digitizing Their Work Organizations are digitizing the workstreams previously performed in physical environments and reengineering their existing digital processes to gain more speed and efficiency. Flexible and adaptable software will determine the success of these digital transformation efforts and how businesses will compete in the digital era. For the first time, International Data Corporation (“IDC”) forecasts global digital transformation spending to exceed $10 trillion over a five-year period, and technology investments to greatly accelerate over the course of 2022. Organizational Agility is Critical to Business Success According to a 2021 IDC global survey, agility has become a business imperative – while only 11.6% of companies have achieved optimized agility, those organizations perform better on key performance indicators and see superior financial results. These agile companies saw 30% greater customer loyalty, 35% greater employee retention, and 30% greater customer experience. Additionally, agile organizations are more than three times as likely to have fully digital business processes that can be dynamically created and adjusted. To keep up, more companies are increasingly relying on software to increase their agility and maximize resiliency to change. To close this gap and keep pace with rising customer expectations and evolving needs, organizations are increasingly relying on software to increase their agility and become more resilient to change. 50 Work is More Distributed, Cross-Functional, and Reliant on Software Organizations are increasingly adopting distributed models of work across geographies through a combination of on-site and remote locations. According to Gallup, 45% of U.S. workers worked from home either all or part of the time as of September 2021. Additionally, teams must increasingly work together and across departments within organizations to collectively address problems and achieve optimal outcomes. As a result, organizations are becoming more reliant on software to foster a culture of inclusion and drive business success. Everyone Needs to Leverage the Power of Software to do Their Jobs Historically, the full power of software was only accessible to a limited number of highly trained employees who could manipulate and customize it based on their organization’s preferences. The digital transformation of organizations and the increasing need for flexible solutions to address evolving and complex problems have made it necessary for a larger portion of the 1.25 billion global information workers (according to Forrester in 2018) to be able to create software tools to fit their needs. Access and Adoption of Software Can Be Frictionless Software has historically been too complex, unapproachable, and expensive for end-users to access. More recently, software design has focused more on user experience and enabling frictionless adoption. Additionally, the internet has allowed users to download, experiment, and purchase software on their own, and the emergence of the software-as-a-service industry has also enabled users to more easily adopt software. We believe these trends are important to democratizing the power of software for everyone and fostering a culture in which users enjoy using their software. Software Automation is Poised to Unlock Human Potential Recent advancements in software automation have the ability to transform human potential and productivity. Automation eliminates manual, repetitive work and enables information workers to focus on deeper, more impactful work, eliminate manual mistakes and increase productivity. Our Opportunity Rise of the Work Operating System Organizations have historically run their businesses completely dependent on pre-packaged software. They also relied on solutions internally developed by a fraction of their employee base who did not fully understand the way users think and want to work. As a result, organizations were forced to manage and run their businesses to fit the software they were provided, instead of in a way that fits their needs. These rigid frameworks limited their ability to work efficiently and with agility, grow their businesses and have a complete perspective of their businesses. Work OS is our vision for democratizing the power of software for everyone so organizations can easily build software applications and work management tools that fit their needs. Our Work OS allows users, teams, and organizations to create their own solutions to suit their specific and ever-growing needs and gives organizations a unified view of their operations. As adoption of our Work OS, through our products, grows within an organization, it becomes the unified workspace that acts as the connective layer across all of an organization’s applications and departments. Our Work OS is broadly applicable for any organization and team across a growing number of use cases. According to estimates from IDC, our total addressable market was $56.1 billion in 2020 and will grow to $87.6 billion in 2024, representing a 4-year CAGR of 12%. We calculate these figures by summing the sizes of the following markets, which correspond to the most common use cases on our platform: project and portfolio management ($4.0 billion), collaborative applications ($21.7 billion), sales force productivity and management ($11.5 billion), software change, configuration and process management ($4.6 billion) and marketing campaign management ($14.3 billion). Because our platform serves many different verticals, we believe we have the ability to grow our market opportunity rapidly and expect to add more verticals over time. 51 Our Platform With our Work OS, organizations can build software applications and work management tools to fit their needs. Our no-code and low-code platform consists of modular building blocks that are simple enough for anyone to assemble yet powerful enough to build solutions that drive the core business of any organization in any vertical. On top of the Work OS platform, we have built a suite of products, for the marketing, project management, work management, sales CRM and software development verticals, to address the needs of specific industries and use cases. Additionally, we have two independent products that can be used without our Work OS, to provide users with a digital whiteboard and forms for data collection. Users use boards to hold any information and processes they have, within items and columns. Our schemaless database infrastructure is completely flexible, allowing users to easily define the way they capture and present data. They use views to manipulate and consume that board information in different ways. Users can create forms to capture data from anyone, including non-monday.com users. Integrations pull data from other applications into the board, export data to other systems, and synchronize data across applications. Automations eliminate repetitive manual processes, saving time and reducing human error. Users build dashboards that pull data across many boards so stakeholders can get a complete high-level view on anything they may want. Users can access a variety of monday.com “stores” to further customize any kind of building block: for example, the column store allows customers to add new data types to any board, including location, formulas, numbers, text, and dates. The views store provides different types of interactive interfaces, including calendar, location, and timeline views. The dashboard widget store includes many widgets such as graphs, lists, and numbers for use in any dashboard layout customers want to create. Users can organize their boards and dashboards using workspaces. 52 Our Products Our products, built on top of our Work OS platform, include the following: • monday work management, where customers can build workflows that suit their needs using no-code building blocks to manage any kind of work. • monday marketer, which allows customers to plan and track all aspects of marketing and creative campaigns. • monday dev, where product development teams, including R&D, design, and product management, can plan, build and launch new products. • monday projects, which allows customers to plan, manage and execute more complex projects or portfolios. • monday sales CRM, a CRM for tracking and managing all aspects of a sales cycle and sales operations from leads to customer projects. 53 We have two additional products, with differentiated pricing, designed to complement our Work OS. Customers can use these products independently of monday.com Work OS: • monday Canvas, a digital whiteboard for real-time, unstructured collaboration. • monday WorkForms, which allows users to create personalized forms or surveys and gain organizational insights. Our products serve as an entry point for specific industries and include tailored features to fit the needs of a specific industry’s use cases. Our Apps Marketplace We expanded the scope of our building blocks by extending our platform to external developers through a low-code framework and apps marketplace. Our low-code framework and flexible application programming interface allows customers, partners, and external developers to easily create their own building blocks and apps, either for private or public use. Developers and app builders can also distribute their building blocks and solutions through our apps marketplace. While marketplace vendors have already monetized their apps through third-party payment systems, we recently launched a payment processing system directly from within the platform. Additionally, we have a growing community of partners across different channels and independent software vendors that are adding and expanding their businesses by leveraging our apps marketplace. From cross-industry apps to diverse niche apps, we provide the platform and the tools needed to allow customers and vendors to easily build their own apps, which further supports the potential of our platform and our long-term growth. 54 Key Benefits to Our Customers Our platform enables customers to: • Democratize the Power of Software to All Users. The possibilities of our platform are virtually endless, as it enables each user to manipulate and access software in ways that fit their needs. • Accelerate Digitization. Our platform helps our customers digitize their business operations and re-engineer existing digital processes to make them more efficient. This enables our customers to increase their organizational agility, speed, and efficiency. • Create a Unified Workspace. By serving as a connective layer, our platform brings organizations’ departments, applications, and data into a unified workspace. This enables organizations to make complete, data-driven decisions, eliminate silos across the organization and centralize all tools in one place. • Make Data-Driven Decisions. Everything in our platform is data, which can be tracked, measured, and analyzed. Our customers are able to capture new insights that were previously unavailable to them. This allows them to implement more data-driven decision-making. • Increase Productivity and Deep Working. We believe our platform greatly reduces the reliance upon meetings, communications, and emails. This gives employees significant time back to their days to perform more work and unlocks greater potential. Additionally, our platform automates repetitive, manual, and error-prone work, which frees up our users’ time and energy to focus on more impactful work, such as creative thinking, problem-solving, and innovative ideas. • Enhanced Company Culture. Our platform helps to foster a culture of inclusion, ownership, and clarity. By empowering everyone to think more holistically and have access to greater information, our platform helps promote better idea-sharing and brainstorming within an organization. 55 The Components of our Platform The key components of our Work OS include: • Boards: capturing data and managing processes. Boards work to capture data and manage processes. Our boards are at the core of our platform, as they are the starting point upon which all functionality on our platform is built. Each board has the infrastructure of a schemeless database with an easy-to-use interface, which users can easily customize, populate, and build applications upon. • Items: customized to fit any use case. An item is a row within a board that can represent virtually anything a user chooses, including an entity, workstream, or campaign. Users populate items with actions, steps, leads, contacts, or other elements of a workstream. 56 • Columns: represent data in a tailored way. Each item has a number of columns associated with it. Users add columns to identify owners of an item or workstream, track the status of an item, rate specific items, add files related to the item, along with many more options. Users can also customize columns to fit virtually any use case. • Views: visualize and manipulate a board’s contents for any need. We offer a variety of views, allowing a board’s contents to be visualized and interacted with in a way that suits a user’s needs. Users can update their data within any view they choose, with these changes reflected on the board in real-time. • Workdocs: collaborate on a powerful doc that empowers users to turn words into actions. We recently launched, monday workdocs, a powerful building block that enables users to work together simultaneously on the same shareable documents. Users can tag each other and embed boards and dashboards so that they can stay within the context of their workflows and processes. They can co-edit in real-time, instantly share comments, and drag and drop text without disrupting other users working on the doc. • Forms: capture data from others, including non-monday.com users. Users can capture additional data through intuitive, web-based forms that are easily populated by their recipients, including from non-monday.com users. Each submission generates a new item within the board, with all of the data supplied by the recipient automatically populated in the relevant columns. • Automations: create complex workflows that automate repetitive processes. Automations are triggered based on actions that occur or thresholds that are reached and can include notifications, item creation, assignment of ownership and due date, and moving an item to another board. Users can automate work using our predefined automations or create their own. • Integrations: connect with external tools to share data and automate actions across tools. Integrations allow our users to connect with external tools to share data and automate actions across tools. Currently, our integration center includes 50 integrations to other tools and growing, such as Gmail, Outlook, Jira, Salesforce, Google Drive, Dropbox, Stripe, Slack, and Zendesk. Users can find additional integrations in our apps marketplace or build their own using the monday.com API. • Dashboards: a high-level view of everything happening across an organization. Users can create dashboards with summaries and reports from data across multiple boards to track progress across all of their monday.com workstreams. These dashboards can provide visualizations of everything that is happening across their organization. • Dashboard widgets: track all data on a single pane of glass. Users can select any dashboard widget according to the data they want to display to build a dashboard, with different visualizations of the data they want to track, all on a single pane of glass. Dashboard widgets allow users to immediately gain high-level insights and analysis visually. • Workspaces: keep work organized as work increases. Users can organize and centralize boards and dashboards using workspaces, which are defined by any category the user chooses. In large organizations, workspaces can represent a department or a team working on a project, for example. • My Work: centralize all assigned items in a single place. We recently launched My Work, a place for customers to centralize all items — whether it’s deals, campaigns, tasks, or anything else — associated with their account. This mega-table gives individuals within teams the ability to gather customized data across all business units and see the items to which they are assigned chronologically organized by due date. 57 Mobile Application Mobile capabilities have become a key requirement for users as more work is done outside the office, including in industries where operational mobility is critical to success, such as construction or real estate. We have invested in our mobile development to ensure the high performance of our platform on smartphones and tablets. Our native mobile application is built for both iOS and Android and is designed to support mobile-first customer use cases. Our mobile application’s robust functionalities differ from the desktop version, as we designed it to be more compact and thumb-friendly, creating an easy-to-use, on-the-go experience. Our Technology and In-House Tools Extensible Technology Platform monday.com is a cloud-based, proprietary software-as-a-service platform that is built to be fully resilient and fault-tolerant while staying agile, flexible, and fast. To accomplish this, we utilize multiple data centers across multiple geographical regions of AWS and Google Cloud Platform. Our in-house business intelligence tool, BigBrain, supports our data-driven culture by providing every monday.com employee easy access to the Company’s core data that is required for their job. We believe this allows our employees to work efficiently and provides them the ability to do their job the best way possible. BigBrain collects and processes data from over 420 million events per weekday from multiple separate sources and aggregates it into one place that every employee can access. This enables our team to analyze and make informed decisions based on transparent data, in real-time. BigBrain includes various tools such as a landing page generator, an AB test tool, and media buying statistics tracking, all of which were built by our in-house team. BigBrain also aligns our team around key performance indicators (“KPIs”) and metrics. We proactively connect employees to the business status by sending a daily SMS with high-level KPIs and strategically distributed data dashboards powered by BigBrain throughout our offices. We believe BigBrain supports our core product by paving the way for quick-to-market, efficient and high-quality execution. It also aligns with our values of transparency and trust within the monday.com culture. 58 Our Customers We have a large customer base that consisted of more than 152,000 customers as of December 31, 2021, an increase of 34% from the more than 113,000 customers as of December 31, 2020. Our customers span across thousands of use cases and across more than 200 different industries and range from teams of two users to organizations of 7,000 users. Since inception, we have been focused on ensuring that any user can easily adopt our platform on their own regardless of his or her technical skills. Because of our easy-to-use interface, customers across industries use our platform, with more than 70% of our customers working in traditionally non-tech industries, such as real estate, banking, journalism and construction, alongside customers from traditionally tech industries, such as IT management, software development and e-commerce. Research and Development Our research and development (“R&D”) group, which we also refer to as our “builders group”, consists of autonomous, multidisciplinary teams of engineers, analysts, designers, and product managers, each with high talent density and its own product mission. These small and agile teams are empowered to make independent decisions, move quickly, and are able to execute at a faster pace, releasing over 10 deployments a day while meeting high-quality assurance standards. Our builders group works in a closed loop of customer feedback, testing, and data to remain connected to our users to keep our product aligned with their needs. We invest substantial resources in R&D to improve and scale our product. The builders group is a lean and efficient organization within monday.com with a highly significant impact on our revenue. As of December 31, 2021, we had 232 employees in our builders group. Sales and Marketing We employ a hybrid approach to sales and marketing, combining an extensive self-serve funnel with direct sales from our partners and sales team. Marketing With our bottom-up marketing approach, we initially target customers on the team level. We cast a wide net of performance-based marketing, brand advertising, and organic marketing across several digital and offline channels. Because of this wide reach, our marketing efforts bring a variety of leads, from small businesses to Fortune 500 companies. Upon discovering our platform, customers enroll in a 14-day free trial of our Pro plan, after which they are prompted to either continue with our Individual plan for small teams (limited to two users) or pay for one of our four paid subscription plans. As these customers convert and realize the benefits of our platform, they invite more teams to join. As a result, we also benefit greatly from viral, word-of-mouth marketing. As we continue to expand upmarket, we have recently established a top-down lead generation strategy in addition to our bottom-up marketing effort. This strategy focuses on targeting decision-makers within organizations and delivering qualified leads to our sales teams and partners. This strategy includes account-based marketing, marketing events, lead sourcing, and cold outreach. 59 Sales As our self-serve funnel customers grow, and as part of our flywheel sales approach, our sales teams actively monitor customers’ usage patterns and engage to help them achieve their goals and become more successful. Our sales team consists of account executives and account managers, who are segmented by region and customer size. Our account executives are primarily focused on acquiring new customers, while our account managers are primarily focused on helping existing customers expand their usage within their organization. With the addition of our Work OS products, we have created a cycle augmenting our flywheel approach. When a customer adopts one product, they can easily adopt additional products as all are built on top of the Work OS. While our product effort is just beginning, we believe it will augment the adoption and growth of our Work OS platform. Our Customer Success Teams Our customer success teams are experts regarding the monday.com platform and augment our sales teams by helping customers realize the benefits of the platform. By ensuring that our customers fulfill their business objectives, our customer success team helps increase usage of the platform and long-term loyalty. They also play a key role in the flywheel sales motion, supporting account expansion. Our Partners Our global partner ecosystem was built to extend our reach, add product value, and position monday.com and its partners as leaders in the market. Our broad ecosystem includes leading enterprise software companies and emerging startups, global systems integrators, and channel partners. Since establishing our partner program, we have recruited more than 149 channel partners, in 48 countries across the world. With a wide array of vertical and industry expertise, our partners do more than just sell our products, but also providing professional services and extending our products with partner-led solutions. We have partnered with some of the world's leading tech companies such as Adobe and Microsoft as well as with a broad set of independent software vendors, to deepen our products and strengthening our ability to serve as the connective layer across organizations. We also hold strategic alliance agreements with global systems integrators such as KPMG. We formed these alliances to further our global reach and work together to help customers achieve digital transformation with deep, enterprise-grade solutions built on top of our Work OS. Our Customer Experience Team Our customer experience team provides 24/7 support to our customers. We offer support to every account and every user, with extended service to enterprise customers. All customers receive an extensive self-service knowledge base, weekly webinars, on-demand demonstrations, and access to the monday.com community, a place to connect with thousands of monday.com users to learn and share ideas. Our extended service includes priority support and specialized onboarding services, along with additional services. 60 Our Competition We are creating a new category of software, our Work OS, that seeks to change the way people work and businesses operate. As a result, we compete across multiple different markets. Our competitors include the following: • companies that primarily offer project and work management solutions, including the application of processes, methods, skills, and knowledge to achieve specific objectives. This includes companies such as Asana, Inc., SmartSheet Inc., Notion, Inc., Atlassian Corporation PLC (Trello), Citrix Systems Inc. (Wrike), Zendesk, Inc., ClickUp, Airtable, and Freshworks Inc.; and • companies that offer products across other use cases we serve, such as customer relationship management solutions, software development tools, and marketing campaign management. This includes companies such as SugarCRM, Pipedrive, Zoho, Inc., Atlassian Corporation PLC (Jira), Procore Technologies, Workday, Inc., BambooHR, LLC, Hootsuite Media Inc., and Adobe Experience Cloud. In the future, we will likely face increased competition from a number of Work OS providers. Our principal competitive factor is our open and modular infrastructure, leading in flexibility and adaptability and our ability to scale our vertical and horizontal offerings as we continue to rapidly build end-to-end products. We believe that our ability to compete successfully depends primarily on the following factors: • our ability to introduce new and improve on existing, features, products, and services in response to competition, user sentiment, online, market and industry trends, and the ever-evolving technological landscape; • our ability to continue to increase social and technological acceptance of our Work OS; • continued growth in the digitalization of the workplace; • our ability to maintain the value and reputation of monday.com as a solution; and • the scale, growth, and engagement of our community relative to those of our competitors. Intellectual Property Our intellectual property is valuable and important to our business. To establish and protect our proprietary rights, including our proprietary technology, software, know-how, and brand, we rely upon a combination of patents, designs, copyright, trade secret, domain names and trademark rights, and contractual restrictions such as confidentiality agreements, licenses, and intellectual property assignment agreements. Although we take great effort to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new modules, features and functionality, and frequent enhancements to our platform, are more essential to establishing and maintaining our technology leadership position. 61 We have developed a patent program, and a strategy to identify and apply for patents for innovative aspects of our platform and technology. As of December 31, 2021, we had 62 U.S. patent-pending applications, 18 allowed U.S. patents, and two U.S. provisional patent applications relating to certain aspects of our technology. We also had seven omnibus patent cooperation treaty applications covering 69 inventive concepts to allow us to pursue patent registration in foreign jurisdictions. We have trademark rights in our name, logo, and other brand elements, including trademark registrations for select marks in the United States and other jurisdictions around the world. We also have design registrations and applications in the United States and the European Union, as well as domain names for websites that we use. We intend to pursue additional trademark and design registration to the extent we believe it would be beneficial. Legal Proceedings We have not been, and are not currently, a party to any material or pending litigation or regulatory proceedings that could have a material adverse effect on our business, operating results, financial condition, or cash flows. From time to time, we may be involved in legal or regulatory proceedings arising in the ordinary course of our business. monday.com ESG The monday.com Way Our culture is why we win. Our culture is more than a catchphrase or a poster on a wall. It is what we do. It is how we act. Our culture is the ‘monday.com way.’ • Transparency and Trust. Radical transparency, data accessibility, and trust allow us to reduce complexity, ensure that we are all working towards the same goal, and increase accountability and ownership. Transparency is a tool that helps us harness our collective intelligence and eliminates politics and bureaucracy. • Customer-Centricity. We have achieved leading benchmarks for customer service, answering tickets above-average industry response time. We prioritize customer satisfaction over our potential short-term gains, and we believe that when our customers win, we win. • Product-first. We believe that a product should work for the customer and not the other way around. Every feature is designed to be intuitive and accessible, as evidenced by the fact that more than 70% of our customers work in traditionally non-tech industries. • Ownership and Impact. We empower our employees to make their own decisions so that they can maximize their impact. We believe autonomy allows our employees to move faster, be more efficient and learn from their own mistakes. • Speed and Execution. Speed is the key to success in everything we do. We constantly push the tempo to learn fast, gain first-mover advantage and deliver quickly. As we continue to scale, our ability to execute and adapt quickly will continue to give us a competitive edge. • Inclusivity. Diversity, belonging, and inclusion are rooted in the core of our company. We celebrate individuality together as a team. We’ve embedded inclusivity within the company’s values, but also within the platform, providing a user experience open to everyone. 62 Privacy and Security We are committed to providing our customers with a highly secure and reliable environment and to give them peace of mind while managing their data on our Work OS and products. By using top-of-the-line security tools and aligning with the strictest security measures available on the market, we are devoted to providing the highest security and data protection standards. We earn the trust of our customers by making data security our top priority. Our security efforts are guided and monitored by our Chief Information and Security Officer, our dedicated security team and a ‘security forum’ composed of representatives from the Infrastructure, R&D, Operations, and IT Teams. Our security model and controls are based on international standards and industry best practices, such as ISO 27001, ISO 27018, OWASP Top 10, and are subject to independent annual SOC2 Audits. Additionally, our security model and controls include HIPAA-compliant features. We have a dedicated privacy team that builds and executes our privacy program, which includes working with our legal teams to conduct product and feature reviews, privacy and impact assessments, and support for data protection and privacy-related requests. We monitor guidance from industry and regulatory bodies and update our product features and contractual commitments accordingly. Our Facilities Our current corporate headquarters are located in Tel Aviv, Israel where we lease approximately 120,000 square feet pursuant to an operating lease that is expected to expire in May 2031. We plan to expand our current headquarters by an additional 80,000 square feet by September 2022. We also lease office space in New York City, London, and Sydney. By the end of 2022, we plan to lease additional office space in Tokyo, Warsaw, Sao Paulo, Miami, and San Francisco. We further intend to expand our global facilities and lease additional office space as we recruit more employees and enter new geographic markets. We believe that suitable additional or alternative space will be available as needed to accommodate any such growth. We are committed to ensure that all new buildings, even though led by Third-party developers, follow sustainable principles. Our offices are designed to support our work culture. We promote ownership and transparency with a completely open workspace and glass-walled conference rooms. There are no private offices, without exception. All of our meeting rooms are optimized for both online and face-to-face meetings to facilitate seamless collaboration between employees globally. We also strategically place hundreds of dashboards throughout the office to encourage transparency and data-driven decision-making. 63 64 The monday.com Digital Lift Initiative On May 21, 2021, we established the Digital Lift Initiative to further our mission of closing the digital divide between the for-profit sector and the nonprofit sector. Our goal is for the Digital Lift Initiative to provide a robust digital transformation toolbox for nonprofit teams. In order to carry out our Digital Lift Initiative, we established the monday.com Digital Lift Foundation, a 501(c)(4) social welfare organization under Delaware law, and intend to establish similar charitable organization in Israel that may either be owned by the 501(c)(4) social welfare organization or act as its replacement. The monday.com Digital Lift Foundation will be charged with helping us carry out our social responsibility mission. The digital transformation toolbox for nonprofit teams consists of monday.com licenses and product support, digital infrastructure, education, services, technology grants, and volunteer support, including the following: • 100% Product match. We offer up to $1 worth of free or substantially discounted monday.com subscriptions to nonprofit organizations, including product support, for every $1 of revenue we generate. Since establishing the initiative, we have provided discounts to over 8,500 nonprofits amounting to a total of $7.2 million in annual recurring revenue (as of December 31, 2021). • 10% Equity pledge. Following our pledge to contribute 10% of our equity to the Digital Lift Foundation, we reserved 2% prior to the IPO and intend to donate the remaining 8% gradually with a cap of 1% per year. We are currently working with a research firm to further explore the depth of the digital divide and identify areas where the foundation can make a strong impact. • 1% Employee time. We provide every employee with the opportunity to volunteer 1% of their paid work time to any approved charitable or community initiative. Since announcing the initiative, our employees have already volunteered over 550 hours to support nonprofit organizations. Digital Lift Activities: Fighting COVID-19 in Eswatini. To help fight the spread of the COVID-19 pandemic in Eswatini, we sent a monday.com delegation to implement monday.com in the local COVID-19 control room and streamline the distribution of vaccines in the area. After initial implementation and consultation, the local leaders continued to operate the vaccine rollout independently through the platform. As of December 31, 2021, over 300,000 vaccines were distributed in Eswatini with the help of monday.com. The optimized system helps avoid vaccine waste and empowers government officials to make data-driven decisions. 65 monday.com Solutions for Nonprofits. Following our pledge to offer free or substantially discounted monday.com licenses to nonprofit organizations, we also dedicated resources to develop bespoke workflow solutions on top of monday.com for nonprofit work, including a ‘donor’ CRM to manage donor relations, a grant management system for submissions and reporting, and a volunteer registration system. Leveraging Technology to Aid Afghan Refugees. Following the escalation of the humanitarian crisis in Afghanistan, we dedicated resources to help Afghan evacuees secure emergency housing and long-term resettlement. We started by sending laptops to Afghan refugees in Albania to enable them to apply for resettlement, and access online classes and jobs. We worked in collaboration with IsraAid, an NGO that administered the distribution of the laptops and facilitated the process. We then built a monday.com solution for Vital Voices, and the Georgetown Institute for Women, Peace and Security, to help them streamline the resettlement process with the US Institute of Peace. With the new system, they were able to process approximately 1,200 resettlement applications from refugee camps across seven countries. Digital Transformation Grants. As we continue to learn about the nonprofit landscape and digital divide, we have dedicated a pilot fund of $100,000 to help nonprofits optimize their operations with various SaaS platforms by removing the cost barrier of licenses. As we assess the results of the pilot, we plan to dedicate additional funds and resources to this initiative. See “Risk Factors — Risks Related to our Digital Lift Initiative and the Digital Lift Foundation.” Our Workforce As of December 31, 2021, we had 1,064 full-time employees worldwide. Provided below is a breakdown of employees by region: Region Employee count Americas 291 EMEA 727 APAC 46 Diversity and Inclusion At monday.com, we are committed to fostering a workplace culture of equity and inclusion. We value all backgrounds and beliefs and recognize that diversity is essential to our innovation, creativity, and continuous success. Spearheading our diversity efforts, our sites in the United States continuously work to strategically source candidates from underrepresented backgrounds in tech by building partnerships with HBCUs (historically Black colleges and universities), HSIs (Hispanic-servicing institutions), and women’s colleges. 66 We have set goals to align our workforce, in any given office, with the demographics of the surrounding community to keep perspective and relevance. This allows us to have office specific goals, which will be defined in our annual Environmental, Social and Governance report. We will continuously work to maintain and improve the diversity of our workforce across all sites, as seen in the following examples: • Ensuring equitable practices with a DEIB specialist. We are currently recruiting a DEIB (Diversity, Equity, Inclusion, and Belonging) Specialist to build and implement programs and policies to maintain equitable internal practices and support diversity across all of our sites. • Encouraging employee forums. Alongside our anticipated DEIB goals, we have established multiple internal employee forum groups, including Black, Parents, International, Asian, Latin, Pride, and Mental Health, aimed at creating a sense of community and free speech for employees to voice their opinions to each other and the Company. monday U In August 2021, we launched monday U as a social initiative to help candidates without experience land their first job in the high-tech industry. monday U offers a variety of free role-based certification programs for candidates of all backgrounds, with an emphasis on underrepresented communities. With the growing talent shortage in the high-tech industry, we recognized a significant gap between companies in need of skilled talent, and candidates without experience who are struggling to find their first job in the industry. By providing practical, hands-on training, we aim to help minimize this gap, as well as support our own hiring efforts. We held the first monday U certification program for Sales and Consulting between August-October 2021. As of March 1, 2022, over 60% of graduates have already secured relevant positions within monday.com and other high-tech companies. With our ongoing placement efforts, we are still working with the remaining graduates to help them find relevant job opportunities. 67 We are currently running three more certification programs for Business Development, Customer Success, and Human Resources, with a total of 125 participants and have opened registration for three additional courses: Data Analysis, Product Growth and Full Stack Development. We aim to continue opening additional certification programs to help more candidates find rewarding positions in a booming industry, no matter their background or experience. Learning and development. Through our learning and development programs, we work to continuously improve the performance of our workforce and invest in the career development of each employee. Management workshops. We believe that one of the best ways to retain and develop our talent is by ‘leading the leaders’. We conduct ongoing sessions with our first-line and second-line managers to provide them with the tools they need to manage, mentor and develop their employees. The sessions also empower them to effectively deal with day-to-day managerial challenges and conflicts in order to create the best possible work environment. Talent development. We are committed to the personal and professional development of all our employees. We have several programs in place such as the Juno Journey platform that offers thousands of external learning resources tailored to each employee’s professional growth path. We offer multiple internal courses as well, including stock option education, employee knowledge sharing and more. An annual budget is reserved for each business unit within the company to provide profession-specific education and training to their employees. We also have a comprehensive internal mobility program in place to empower employees to follow their interests and seek new career opportunities within monday.com. Rewards program Our rewards program is designed to recruit and retain top talent worldwide. We offer market-competitive compensation and benefits packages in an equitable way. We assess these programs on an ongoing basis in order to maintain our competitiveness within the industry and ensure intrinsic value for all of our employees. C. Organizational Structure The legal name of our company is monday.com Ltd. and we are organized under the laws of the State of Israel. The following table sets forth our key subsidiaries, all of which are 100% owned directly by monday.com Ltd.: Name of Subsidiary Place of Incorporation monday.com Inc. Delaware, United States monday.com Pty Ltd. Australia monday.com UK 2020 Ltd. United Kingdom monday.com Ltda. Brazil monday.com K.K. Japan 68 D. Property, Plant and Equipment For a discussion of property, plants and equipment, see “Item 4.B. Business Overview—Our Facilities.”